A couple of notes. There is an unusual flurry of activity around our shores these day on account of a major military exercise involving land, air and sea forces from several NATO nations. Civilian vessels are being used, and Stornoway Airport will be used for staging a mock attack upon.
The snow on Cairngorm will only be shortlived; milder air is on its way from the Atlantic, which will plague us through tomorrow with rain. Current temperature (9.20 pm): 5C / 40F.
Here in the UK, the mini-crisis surrounding savings and mortgage bank Northern Rock rumbles on. Savers have been withdrawing their deposits en masse, in spite of government assurances that in the case of the bank folding, their money will be 100% safe. Not 90% as before. This all goes back to what is euphemistically called the sub-prime crisis over in the USA. I'm not a financial expert, but as far as I understand it, mortgages were sold to people with a poor credit rating. They could either not afford them, had defaulted in the past or similar things. These mortgages had to be underwritten, and as people started to default, the gaps had to be plugged. And the mortar for plugging the gaps was suddenly nowhere to be found; nobody wanted to take on these debts. By nobody, I mean major financial institutions. There is something faintly daft about the selling of debts. You're basically plugging one hole with another, and you buy and sell air. The other problem is that house prices have skyrocketed, leading to an increase in people who are rated as 'sub-prime'. In the past they may have been able to afford a mortgage (you can afford a mortgage worth 3 times your annual salary), but not now. Locally, this situation is born out. Two decades ago, houses in Stornoway were sold for as little as £16k. Now you're paying on average £100k, and it's rising. I think this bubble is starting to burst.
Subscribe to:
Post Comments (Atom)
It's a very scary state of affairs.
ReplyDeleteLori
Thirteen years ago our house was valued at £69,500. Niext door, our neighbour, who is a doctor, paid £315,000 to buy that two years ago. It's rediculous, as now local families have been priced out of the housing market around here because of the inflated prices. Our children have to move away or rent as its too expensive to buy around here now. If they work around here its low rates of pay. City folks with bigger wages can afford to buy to rent for their future pension security. Or use it as a second home/holiday home. Times are definitely changing Guido.
ReplyDeleteIt's much cooler here in the Lakes with intermittent showers. Just a grey sort of a day with no winds.
Jeanie